Official Report: Minutes of Evidence

The Chairperson (Mr McKay): I welcome to the Committee Mr Ciaran Kearney, chairman of the NI Sports Forum; Ryan Feeney from Ulster GAA, a late substitute for Mr Danny Murphy; Mr David Johnston, funding manager of Ulster Rugby; Dr Shaun Ogle, performance system manager at Sport NI; and Mr Jim Shaw, president of the Irish Football Association (IFA). Have any of you a prepared statement that you want to make before we go to questions from members?

Mr Ciaran Kearney (Northern Ireland Sports Forum): Thank you very much, Chair and members. I will start. I am the executive manager of the Northern Ireland Sports Forum, and I thank you for the opportunity to appear at the Committee to discuss the Rates (Amendment) Bill.

I think that it is worthwhile to provide to members who are unfamiliar with our work a brief introduction to the role of the Northern Ireland Sports Forum. The forum is a voluntary association whose membership consists of 64 governing bodies of sport, 18 associate members and 16 individual members with an interest in sport and physical recreation. We are the recognised umbrella organisation for the voluntary sector of sport in Northern Ireland, and we act as the independent voice of voluntary sport in Northern Ireland. Among our members are the three governing bodies here with me today: Ulster Rugby, Ulster GAA and the Irish Football Association. A range of further members includes the Golfing Union of Ireland (GUI), Ulster branch, Cycling Ulster, Ulster Hockey, Swim Ulster and the Canoe Association of Northern Ireland. Associate members include Disability Sport NI and the Mary Peters Trust, along with numerous council sports advisory committees. Our membership consists of many organisations that operate on an all-island basis, some Northern Ireland bodies and some provincial or regional bodies affiliated to either Irish or British national governing bodies. We receive funding from Sport NI and work alongside it to support our members in the three key areas of governance and leadership, representation and communication. With governing bodies being of vastly different sizes, we aim to provide necessary support to members as required.

We have worked alongside the Chair on his private Member's Bill, and I am proud to say that the response from the sporting sector was overwhelming. The number of responses received demonstrates how sports clubs feel that they need, through rates relief, to be able to maintain and develop sport throughout their communities. At this stage, we are unsure about the overall detail proposed by the Minister, but, last week, I met Brian McClure of the Department, along with Ken Armstrong of the Belfast Indoor Bowls Club and representatives of the Federation of Clubs to discuss the Bill's next steps.

In the short time available to consult our members on the Bill, I have been able to take the views of the Golfing Union of Ireland, Ulster Branch; the Royal Yachting Association NI (RYANI); the Northern Cricket Union (NCU); Ulster Badminton; and Ulster Hockey. All those organisations are adamant that the income from the bars of their sports clubs is used to service the running costs and operations of the sport. Profits from the bars are used to maintain and restore changing and storage facilities, to improve playing pitches, courts and courses and to ensure that membership costs are kept to a minimum. The bars are not used to increase profit for the sake of profit. In Northern Ireland, there are approximately 3,600 sports clubs, and, according to the Department, there are only 163 community amateur sports clubs (CASCs) with their own facilities.

A survey by the Sport and Recreation Alliance in 2013 showed that only around 40% of clubs in Northern Ireland made a profit. Unfortunately, as a result, clubs have increased membership fees by 45%, and the opportunity to participate in club sport and physical activity is becoming too expensive. The same survey outlined that clubs are not renewing equipment; carrying out less maintenance of infrastructure and playing facilities; and stopping paying expenses to volunteers. A performance pathway for sports with poorer equipment, poorer facilities and fewer volunteers will lead to a lack of participation and, ultimately, the chances of medal success being diminished.

Kevin Stevens of the GUI, Richard Johnson of the NCU, Angela Platt of Ulster Hockey and Ronnie Browne of the RYANI were able to provide me with numerous examples of clubs in their sport that were in severe danger of going out of business due to the financial constraints that they currently face. Some of these clubs are integral to the development of their community, and the health and well-being provided to active members is evident. The closing of major sports clubs in Northern Ireland gives us and our governing bodies major concern. This should also deeply concern the Executive as, without these clubs, our health service, which is already under severe pressure, will become further troubled. One of the governing bodies provided examples of how it has been unable to upgrade facilities to make them suitable for people with disabilities and more attractive for females to use.

We are aware of concerns raised over recent weeks about the impact on the hospitality sector. I am sure that, like you, Chair, many of the Committee have attended sporting functions in hotels, restaurants and bars throughout Northern Ireland. Our member clubs and associations provide significant trade to the hospitality sector. As the voice of the sport sector, we do not believe that the costs incurred in providing greater rates relief to sports clubs should be seen as a detrimental factor in providing that relief. We are of the belief that the Assembly cannot afford not to give further support to sport. Greater investment in sport provides greater benefit to the health and well-being of our rural areas, towns, villages and cities. Sport unites our community in ways that nothing else can, whether that is the pride of seeing your local grass-roots team achieve success or the impact of our athletes and teams achieving international sporting success.

Mr Ó Muilleoir: May we have a copy of your statement?

Mr Kearney: Yes, I can leave a couple of copies.

The Chairperson (Mr McKay): Are there any other opening comments before we go to questions?

Mr David Johnston (Ulster Rugby): I have a short statement. Thanks very much for the opportunity to provide evidence this morning, and apologies that Chris Webster was not able to attend. I will lead on from where Ciaran left off.

At Ulster Rugby, the business model of using bar takings to drive income into clubs is becoming outdated. Very few clubs make a large profit from their bar, which, compared with commercial properties, is underutilised. Bars are utilised mainly on a Saturday to accommodate people on match day and at associated functions. Outside of that, most bars sit vacant and are not open during the week. Therefore, it is difficult to see the comparison. A further point is on the assessment of a club before it can become a CASC. HMRC takes into consideration the ratio of social use against participation in the sport by looking at things like bar turnover compared with overall turnover and membership categories. That provides another level of verification for these clubs of their community benefits and limited bar usage.

Lastly, our clubs are managed and operated solely by volunteers, so any opportunity to ease the burden of running them for the community would be very much welcomed.

Dr Shaun Ogle (Sport Northern Ireland): I will put a little more detail on some of what has been said. We have been involved in research looking at sports economics and management — part of that revolves around clubs and the changes in clubs — and have some specific data from Northern Ireland. The sample was small — 74 clubs — but I think that it was broad enough and representative enough. The point to highlight is that, in 2013, 22 made a loss, 21 broke even and 31 made a profit. The research shows that the average deficit across clubs is in the order of £800. If you look at club size in Northern Ireland, which is fairly small, you see that that is significant for a lot of clubs, so many are living a hand-to-mouth existence.

The nature of clubs, particularly the smaller clubs, is such that there really are no economies of scale. The majority of the costs for much of the infrastructure, such as buildings and pitches, are fixed and do not fluctuate significantly with the number of members or the amount of activity that takes place in the club. In those circumstances, the only logical actions to take are those designed to increase income. As Ciaran said, some 45% of clubs have already increased their income through increasing membership fees. Clubs see themselves as the principal source of income for most of the time. On the other hand, they have tried to reduce their expenditure. What happens there, as we all know, is simply that those things that can be put off, will be put off. They will reduce, for example, the amount of equipment that they buy, maintenance costs and the cost of maintaining the club infrastructure. Clubs in Northern Ireland are in a very fragile position.

Mr Ryan Feeney (Gaelic Athletic Association): Thanks, Chair. I will make a few brief comments. First, the GAA is very supportive of the private Member's Bill. We have 146 clubs currently registered as CASCs and 115 clubs that are not. We encourage all clubs to go down the route of getting community amateur sports club status. We think that a trick was missed during the RPA, given that, in Britain, local government has responsibility for allowing the final 20% relief to be awarded to clubs with CASC status, thus giving them 100% rate relief. I do not think that the legislation in the Assembly marries with that. At the moment, local government here cannot grant the final 20%. We think that that should be explored and encouraged at local government level.

Following on from what the three previous speakers said, we advocate very strongly the social and economic benefits of sport right across the board. My organisation has 411 clubs in Northern Ireland, and 85% of our income is reinvested in grass-roots development. Conservatively, that is about £30 million a year. As Shaun said, significant money goes into self-sufficiency at club level, and we believe in that. That said, there has been a dearth of funding at local government level for sporting facilities, and we think that rates relief is one way that that can be addressed. One club that I am familiar with saves about £2,800 a year because it gets 80% rate relief. A lot of tickets would have to be sold to make that amount. We encourage the Minister to look at the opportunity for full rates relief in line with what is happening in Britain. I praise Gordon Brown for introducing that legislation originally. It was introduced under a Labour Government and has worked quite well. At the moment, we have 74 clubs in Britain that benefit from it, and we think that it should be rolled out in Northern Ireland.

Mr Jim Shaw (Irish Football Association): Chairman and members, I do not want to say anything that has already been said. I do not think that I could add anything to that, so I will talk from a football perspective.

I represent soccer, and we have a different model from Gaelic and rugby, in that fewer of our clubs own or lease their facilities. They mainly depend on councils to provide pitches, accommodation etc. As was said earlier, these clubs are run from pubs that are in the hospitality sector, so we are strongly integrated, through the clubs, with that sector. We have a large number of clubs, excluding, obviously, the senior clubs that do not fall into this category. Below them are a lot of amateur clubs that have their own facilities, and many of them have bar facilities.

We have had the benefit of rates relief on the parts that are dedicated sports facilities. I belong to a big club that covers about 10 different sports, soccer being the main one. The burden of rates on the facilities for the sporting side is still there. The rates for the bar facilities — the line is drawn around the part designated as licensed — are at the full level. There is a great opportunity here to be treated equally, if the proposal for those who lease their facilities to be zero-rated is accepted. The same should apply to those that fund themselves through bars. All the income of those clubs, some of which struggle to survive, goes back into the sports that they support. They make no charge on the community. Most are community sports clubs, which is very important. The one that I belong to has female teams catering for those aged five to 50, men's senior football and bowls. The dedicated sports part of the club is derated, but the bar facilities are, of course, rated in full. From a rating point of view, I would concentrate on the dedicated sporting facilities.

I and a lot of my colleagues in soccer believe that all premises should be zero-rated if the opportunity arises. Maybe that is a big demand, but going down that route would be justified. If the sports facilities with no bar facilities become zero-rated, the same should apply to those that have self-sustaining funding bars.

The Chairperson (Mr McKay): Thank you all very much. David made a point about the use of the bars, and the obvious bone of contention for Hospitality Ulster and a number of others is unfair competition. Is it the case that most bars open only during matches and at weekends? How do you respond to the point that there is unfair competition?

Mr Shaw: I will take that one. We have a village concept in the amateur football league. The likes of Killyleagh, Drumaness and Crumlin United have their own dedicated facilities for soccer. All have bar facilities, one of which may open several nights a week because it provides for other indoor sports like indoor bowls, darts et cetera. Some open only when football is being played at the venue — when players are training and, particularly, during matches. The bar in the club that I belong to opens five days a week, but I assure you that all the money that it has made over the years has gone into the development of football. Over £500,000 has been spent on two football pitches, an external bowling green, squash courts and the facilities that go with those, including changing rooms and a gymnasium. All of that money came from the earnings of the bar.

The Chairperson (Mr McKay): What percentage of clubs in the respective sporting codes would be affected? What percentage of rugby, GAA and soccer clubs have bars?

Mr Johnston: Of the 46 rugby clubs in Northern Ireland, only two or three do not have bars, so it would impact on them greatly.

The Chairperson (Mr McKay): What the Minister proposes would not have any major benefits for rugby.

Mr Johnston: No.

The Chairperson (Mr McKay): OK. What about the other sports?

Mr Feeney: Of the total of 411, between 60 and 70 have bars. In support of what Jim said, GAA and soccer social clubs do not perform the same function as bars, because they open only occasionally. If a community has a large hall, they can get a temporary licence and use it for an event. From the point of view of all the sporting bodies, it is not about promoting alcohol or a culture of drink — in fact, the three organisations do a lot to stymie that — it is about self-fundraising for the community. Somebody can have a pint while watching a match or go into a bar for a social occasion. I have talked to Colin about this, and I understand the concern of Hospitality Ulster, but comparing a social club with a bar that operates in the community is like comparing apples with pears, because a sporting social club does not operate on the same level and is run by volunteers.

The Chairperson (Mr McKay): Ryan, you mentioned a proposal whereby councils would take the decision to waive the 20%. Do you support what the Minister is saying, which is that clubs without bars should get 100% relief and that the issue of clubs with bars should be for councils to decide?

Mr Feeney: At the moment, the legislation in Britain allows for 80% automatic rate relief through CASC. I am not sure whether it was the Finance Act 1998 — that is in my head, but it could be wrong. Local government, then, has the authority to grant the final 20% at its discretion. It is a decision by the council. We advocated that model during the RPA, whereby we get 80% rate relief here. We said that local government should be allowed to have the final say on whether the 20% was topped up, subject to the clubs' contributions to the community and where they stood in the locale. We thought that marrying the existing legislation would be a fair way of looking at it

We did not look at the social clubs. Let us take Silverbridge GAA club in Armagh as an example. As I understand it, what happens is that the entire social club is measured out, and it is fully rated at 100%. The rest of the facility at Silverbridge is measured out and is 80% derated. That is how things stand. To be honest, the GAA's stance on social clubs is very similar to that of the stance taken by soccer. It is dealt with ad hoc. We understand the Minister's concerns. We have lived with the process of social clubs being fully rated. If there was an allowance for 100% rate relief, or local government was allowed to put in the final 20%, I am sure that we could compromise on and live with that process.

Mr D Bradley: Good morning, gentlemen. Will you give us an idea of how a club's activities or engagement with the public would be enhanced were the 100% relief to be introduced? What practical impact would people see on the ground?

Mr Kearney: I was speaking to members this week, and the vast majority were of the opinion that, if their rates cost less and they had more income or flexibility, they would be able to reduce membership fees, which would attract more members to their clubs. They would be able to provide better facilities and update them to ensure that somebody participating in sport could do so safely and with the correct equipment. That would also attract more members.

As I said earlier, we have seen investment in certain sports. There is a need for further investment, and we are looking at how much better we could do at an international level if we had better facilities. We do really well on the international stage in one or two sports, but other clubs and sports organisations would say that they need this help to increase the number of medals that we get across the board and to increase participation.

Mr Shaw: I will add to that, if I may, Chairperson. You will find that, in this day and age, social clubs have deteriorated from what they were in the 1970s, 1980s and 1990s, for lots of reasons. The contribution from not paying rates on the dedicated sports parts of their facilities would be an added incentive because it would go towards supporting their sports. I support what Ciaran said about some clubs having difficulty maintaining their facilities. They created them when times were good and now find it difficult to maintain them. It may not sound like a big contribution, but it would be a significant contribution to their sport.

Mr Cree: Good morning, gentlemen. What effect did the review of the non-domestic rating system have on your clubs?

Mr Kearney: I can give an example of a sailing club that had a revaluation. It told me that there was a severe inconsistency in revaluation. The person who came to the club to do the revaluation did not have a reference point for what they were doing. They looked at a slipway at low tide.

It had to increase the length of its slipway and, when it was told that it was going to cost a certain amount more, it asked why, and the guy who was doing the re-evaluation said, "It is what I think", rather than having a reference point for what should be happening. That seemed to be consistent across the board.

Mr Cree: What about the other sports?

Mr Johnston: We sent the consultation out to our clubs and encouraged them to respond. Any clubs that I have spoken to have told me that there has been no major benefit to them since that took place. One thing that I will say is that I compared a range of 10 to 12 of our clubs, and, on average, they were paying roughly £9,000 in rates a year. That would have a significant impact back into the management and operations of the club. Following on from your point, that could be reinvested back into the community, and community outreach and community programmes could be promoted, which would be a massive benefit. We very strongly advocate that clubs with bars receive the full 100% rates relief as well. In addition to that, clubs with bars run a lot of programmes in that area such as educational programmes and coaching education seminars. I know that, as a governing body, we have to use the bar area in clubs to run capacity-building training for the clubs and community. They are often used as educational spaces as well, so to fully rate the bar area itself would be unfair.

Mr Feeney: From our point of view, Mr Cree, there was a mild increase in the rates that some clubs were paying, very mild in some clubs. Also, an anomaly arose on two occasions where there had to be a meeting with the rates people to discuss CASCs because there was some concern about people qualifying for CASC status. That was sorted out but it caused a level of consternation for a couple of weeks, and there was a mild increase in some of the rates that were being paid.

Mr Shaw: It was similar for us, but one club got a significant reduction in the re-evaluation. That was because it probably had not been looked at for many years and, when it was looked at in this case, it justified a significant reduction. That club was paying £24,000 a year in rates, and that came down by £4,000.

Mr Cree: I know of some sports grounds that had an increase of up to 60% in their rates.

Mr Shaw: Yes, there were some increases.

Mr Cree: When you look at that against the 80% relief, it is a significant factor. Thank you very much.

Mr Ó Muilleoir: Gentlemen, your gender balance is almost as bad as ours. Michaela, thank God you are helping us out here. Congratulations on your success, particularly at community level, which we are particularly interested in. For clarification, is the status of a CASC the same as a charity? Does it get you full relief?

Mr Feeney: No.

Mr Ó Muilleoir: What are the advantages in relation to rates?

Mr Feeney: Charities and CASCs are very separate things. All of us are undertaking a study at the moment to look at charitable status versus CASC. The thing about CASC is that a community amateur sports club has to fulfil certain areas of responsibility under the revenue. For example, you would get 80% rate relief, stamp duty relief — Shaun and Ciaran will keep me right here — and some other mild benefits to being part of it. The key thing for us is that, from the GAA's point of view and from the other sporting codes point of view — I know that this is endorsed by Sport NI — it also got clubs into a level of good financial governance because you have to certify your accounts and return them to the revenue every year. For us, capacity building and good governance is key to participation on the pitch. Therefore, we were advocating very strongly for clubs to go down the CASC route because the situation would be that not only would they get 80% rate relief and some other incentives but they would have to have a very clear governance structure in place for finance.

To go back to the charities, there is an anomaly in the Charities Act whereby, for example, if my club, which is Faughanvale in Derry, folded, and it was a charity, the asset would revert to the Charity Commission for it to sell. Therefore, the IFA, rugby or the GAA would have no control over the asset, whereas, at the moment, if it were to fold, the asset would revert to the GAA, and we could sell it or re-form a club there. That was why we were advocating very strongly for CASC and why — I am making a proposition here — when the legislation was put together in Whitehall, there was a distinction between charities and sports clubs, because, in many cases, sports clubs' governing bodies can step in and take control of the assets of clubs. That was the issue. At the moment, we are working through a paper to look at charity status versus CASC, but we are strongly advocating that other clubs become community amateur sports clubs.

Mr Ó Muilleoir: Ryan, you said that, in Britain, there is full rate relief, except for 20%, and there is conditionality around that 20%. Is that Scotland, Wales and England?

Mr Feeney: Yes, as I understand it.

Mr Kearney: I spoke to the Sport and Recreation Alliance yesterday. It is the representative body for sports, and that is what it informed me.

Mr Ó Muilleoir: The Scottish situation is that, if you have a soccer club that has a bar, facilities, a pitch, a stand of some type and changing rooms, you would pay 20% on the entire thing, unless your council allows you off with that, but it is on the entire property, not just the bar area.

Mr Feeney: The bar area might be an anomaly, because I think that the bar area is still fully rated in England, Scotland and Wales. The key thing to say is that any club that is a CASC in England, Scotland or Wales is given 80% rate relief automatically; the other 20% is at the gift of local government. As I understand it — I could be wrong — the situation at the moment is that, if there is a bar in the sports ground, it is measured out and fully rated and the rest of the ground is given 80% rate relief, unless local government provides the other 20%.

Mr Ó Muilleoir: For you, Chair, or for the Committee Clerk, in terms of the Minister's Bill, as I understand it, she is looking at 100% rate relief for the facilities, but having full rates on the bar area or areas. Is that correct? If that is the case, in terms of the proposition — we will maybe discuss this later — and the idea about councils having a role, which, of course, they cannot have under current legislation, is it too late for us to make that sort of amendment?

The Chairperson (Mr McKay): It is a possibility that we could put forward an amendment to the Bill to include that proposal. In terms of where our proposal is at the moment, what she is saying is that, if there is no bar in the club, the club or CASC will be 100%. If a CASC or amateur sports club has a bar then the status quo will apply, whereby they get 80% on the rest of the club and 100% on the bar.

Mr Ó Muilleoir: On a final point of clarification, Chair, in your late lamented private Member's Bill, did you suggest 20% on the bar areas? You were not giving these gentlemen 100% off everything, were you?

The Chairperson (Mr McKay): No, the bar would have remained at 100%. The rates on the rest of the club would have been 100% relief.

Mr Ó Muilleoir: What was the difference between what the Minister is proposing — I am not trying to get into an argument about yesteryear, but was there a difference? Clearly, it does what these gentlemen are proposing, because they would like it to be Christmas. That is fair enough, and you make a good case for why it should be 100% —

Mr Feeney: We are saying that we could live with a situation where there was 100% rate relief on sports facilities. If we were chancing our arm, to be crude, we would ask for the whole thing, but we could certainly live with 100% rate relief on sporting facilities and social clubs being fully rated, because that is where we are at the moment.

Mr Shaw: I concur with that.

Mr Kearney: Obviously, the three sports can speak for themselves. We have 61 other members, and I could not ring 61 of them within the last day or two. Some of them believe that there should be 100% full relief, regardless of whether you have a bar or not, or whether it is an occasional licence or a full bar, based on the fact that any income that comes from the bar, if there is a profit, goes back into the club. However, as we have seen, the likelihood of profits within sports clubs at the minute is quite low. The Minister's Bill provides 100% relief for those who have occasional licensed bars. The likes of my own GAA club in Cushendall has a bar, but only has a small number of events in the year.

Mr Ó Muilleoir: That is helpful, Chair. I think we all want to see more investment in facilities, amenities, stands, changing rooms, 3G pitches and floodlights. The news this week of money for sporting organisations for the soccer stadia is magnificent, because we really want to be proud of our facilities and amenities. Sometimes, the amenities are not as good as the clubs themselves. I am happy to help and see if we can find a middle road that is helpful to the sporting organisations.

Mr Feeney: Chair, if it helps, we lobbied Minister Poots on this when he was Minister of the Environment quite a while ago. I remember that he had done a bit of work on what it would cost the public purse. I cannot remember the figure, but I know that it was not substantial. That might be something that you might try to resurrect.

Mr Middleton: You are all very welcome. It is fair to say that we all want to see sport grow. We all support it. I should probably support it a bit more by getting involved in sport, but that is something that I could take up in my own time.

Ryan touched on the local government aspect. I agree and probably share the sentiment that a lot of work is going on in local government at the minute to support sport, especially, if I may speak on my own behalf, in the north-west, where councils are doing a lot of work and investing in 3G pitches. I agree that maybe more could be done. It is certainly something that could be scoped out and looked at. Councils could be consulted as well.

I have noticed over the last couple of years an increase in sports facilities being used for social-type events. I understand why, because, in my area, some clubs are struggling and have to diversify to bring in more income. I suppose that is where the difficulty lies in trying to differentiate between clubs that just do sport and clubs that are now trying to diversity. For example, coming into the Christmas period, I am noticing clubs hosting dinners and things that can be of benefit to the community. Of course, there is where the issue arises for the hospitality sector. Are you noticing an increase in that type of activity in your clubs?

Mr Kearney: I would flip that on the other side. I would say that the number of sports clubs that use hotels and restaurants for their annual dinners and awards far outweighs the point that I understand you are making. I think that Shaun referred to the different sizes of clubs. My sports club had a dinner a couple of weeks ago. There were 270 people at it in our local hotel. That is a small segment of what happens across all sports. Clubs have annual dinners, fundraisers and functions throughout the year. I play a bit of Saturday morning football. Where do you go after you play your football? You go to the local bar, if your club does not have a bar. The support that the sport sector gives to private bars far outweighs the other side.

Mr Middleton: I do not doubt that support. I have attended many functions that have been held in local hotels, restaurants and bars. I do not doubt that, but what I am getting at is whether you are seeing an increase on the other side and that people are now, for various reasons — cost being one of them — holding functions in-house.

Mr Shaw: Speaking from my angle, I think that there is, in fact, a reduction in that because, as I mentioned earlier, clubs have lost a bit of their shine, if I could use that term. A lot of events are now held in hotels etc, because they have more relevant facilities for such events. Clubs are fairly spartan in many cases; they are not upmarket because they cannot afford to be. Certainly, in my experience, a lot of functions that would have been held in clubs are now being held in hotels.

Mr Feeney: You make a very fair point, Mr Middleton. I agree with Ciaran and Jim's points. What has happened is that the three governing bodies here — we can speak only for the three here because we work closely together — have deliberately pushed a community element in the work that we are doing. We are saying to community groups, "Come and use our facilities". For example, a Women's Institute group or local historical group would come in and use our facilities and we would give them tea at cost or for free. The majority of those events do not have alcohol served at them. A lot of community groups that traditionally are not involved in sport come in and use our facilities. That has been a deliberate strategy that the three governing bodies have put in place. In many cases, it is free and gratis, but those would not be events where hospitality was engaged or where there was a licence. I agree with Ciaran's point: sport gives significant economic benefits to the hospitality sector. However, your point was about community groups coming in and using our facilities. That would be mildly on the increase, but there would not be a situation where they would be licensed or serving drink.

Mr Middleton: Thank you very much. That is useful.

Mr McCallister: Sorry, guys, that I missed the start of your presentation. I take it that, between the five of you, you literally represent tens of thousands of people in sport who give up their time and volunteer. Obviously, the ones that I am most familiar with are rugby clubs like Banbridge. People who are quite well known now and are playing for Ireland, like Rory Best, start their rugby career between school and a local club like that.

Following on from Gary's point about the risk to the hospitality sector, very few clubs could handle the dinner for 250 people that Ciaran mentioned. I am going to lunch at Ballynahinch Rugby Club on Saturday. They are playing Lansdowne Rugby Club.

Mr Wells: They did not invite me.

Mr McCallister: Jim, you would have demanded that the bar was closed. [Laughter.]

I was going to demand that it was open. I am sure that they would be happy if I took you along.

In most rugby clubs that I know, seating 100 people for lunch is probably the height of it. Jim, Rathfriland Football Club is a good example that we know well. I was at its fiftieth anniversary dinner, but it was at the Slieve Donard Hotel. They could not cope with the numbers in the clubhouse. Other clubs that I know in the South Down constituency just would not have those facilities. They are very much community-based. The bar end of the business probably makes a very modest profit. Rathfriland Football Club or Banbridge Rugby Club could hold events that the Women's Institute might run, a dairy discussion group or an Ulster Farmers' Union meeting and charities needing a venue to present in.

The membership that you guys represent amounts to a huge impact on the community. That is why I would like to push this as far as we can. David mentioned a figure of £9,000 for rates. That can make a real difference to a club. I quite like the concept of devolving the issue to councils for them to look at. That can tie in with their new powers on community planning and how we integrate.

Many sports clubs tend not to be in town centres. Ballynahinch Rugby Club is in the countryside, so I do not see a huge threat to the hospitality sector. Vibrant amateur sports clubs will be very good for the hospitality sector overall, and that is something we want to encourage. It might be worth getting research done on the cost and whether it could be put to local government to handle the 20% element.

I am not excessively worried about the bar. It becomes obvious from the evidence that, if we make huge distinction between a bar and no bar, rugby clubs lose out and are more adversely affected. I suppose that a few soccer clubs would be affected too.

Mr Kearney: I take your point well, Mr McCallister. Actually, I am getting married to a woman from Clonduff, which is in your constituency.

Mr Ó Muilleoir: Does she know? [Laughter.]

Mr McCallister: I went up to Garvagh to get married.

Mr Kearney: The Clonduff club has a bar and a function room but no catering facilities to provide a dinner. They have to bring an outside caterer in, so that is another outside caterer from the hospitality sector. The caterer provides significant quantities of food for the 100 or so people that the club can host.

You are 100% right about where the sports clubs' bars are in the community. They are quite rural. I think that Jim made the point that Belfast city centre is a lot more attractive now than it was 30 years ago. The younger generation and a few of us will say that they would rather go into Belfast city centre to have a few drinks than remain at their club because it is more attractive and the options there are greater. That is why, as Richard, who is sitting behind me, said, a number of clubs that they see that have joint facilities between sports clubs are really struggling and are close to being on the breadline and closing. I do not want to say which clubs, but we are aware of sports clubs that are close to closing.

Mr McCallister: I take that point. The vast majority of the work that I see in our amateur sports clubs is in encouraging youth teams and people giving up their Saturday mornings to coach kids' rugby, soccer or GAA or whatever it happens to be. That is the work that I see. There is no big money-spinner in a bar on a wet Tuesday night in January at a training session. It is usually a case of everybody getting there, doing their training and getting home. It is a very different product, frankly, from having a drink at a rugby club during a small social occasion. It is a very different product in a hotel in the hospitality sector.

Mr Shaw: Chair, you should also remember that licensed clubs have membership regulations applied to them. Technically, you cannot just walk in off the street unless you are a member or you are with a member. That should be taken into consideration. To go back to Gary's point about the hospitality industry, I think that the argument from our side will stand up to scrutiny. If you take soccer, which I represent, we have 1,000 adult teams and 1,000 boys' teams. All those clubs, in my experience, will have Christmas dinner in their hospitality areas, their end-of-season presentation dos, their tenth or twenty-fifth anniversaries etc. That puts more into the hospitality industry than would otherwise be the case because it is only collectively that they will do that; they will not do it individually. There is an argument that the hospitality industry directly benefits from sports clubs. I am talking about team clubs — not individual sports necessarily but team sports. We cover 93% of active participation in sport in Northern Ireland — rugby, Gaelic and soccer — so we cover a large percentage of total sport that is played in Northern Ireland. That is not taking away from the others —

Mr Kearney: The other 61 members.

Mr Shaw: In boxing, there are not that many people participating, although it is a very important sport for Northern Ireland, as are many others. Team sports are the dominant participation sports, without doubt, and for volunteers as well. We reckon that, in football, we have 12,000 volunteers across the spectrum from the kit man who washes the kit to the coaches and the person who drives the bus etc. It is a volunteer sport at the level that we are talking about here.

Mr McCallister: It is a lot of people. My only claim to fame is that I have played football for the Northern Ireland Assembly.

Mr Shaw: That is very important.

Mr McCallister: We get beaten every time we play.

Mr Feeney: I would like to support to what Jim said. In 2009, Sheffield Hallam University released a report on the social and economic impact of sport. Crudely, it says that every event that has 10,000 people in attendance is worth £1 million to the local economy. If you take Ravenhill on a Friday night, that is worth roughly £1·8 million to the local economy. If you take the Ulster Club Finals on Sunday, that was worth about £1 million to the local economy. That is conservative. Perhaps the Clerk will be able to provide members with that report because that is worth looking into. The second point that I will make about Hospitality Ulster is that I do not think that we are too far away. There could be a discussion with Hospitality Ulster to clarify where we stand on our social clubs and their activities and our role to rightly promote the economic development of our hospitality industry. The three governing bodies here are very supportive of that.

The final point that I will make — Jim made a very important point — is that there are 12,000 volunteers in the IFA, there are 250,000 volunteers in the GAA and there is roughly the same number in rugby. If they do five hours a week and you take the minimum wage crudely and multiply that, there is about £330 million going into the social economy in volunteering from the three governing bodies here. We make a significant social and economic contribution. We believe in economic development, and I think that we are not too far away from getting some level of agreement with Hospitality Ulster on it.

Mr McCallister: That is good. Thank you.

Ms Boyle: Apologies. I missed the beginning of the presentation also. I declare an interest as a member of the GAA, in a hurling club in my area.

Following on from Gary's question — I do not have a question, I just want to make a comment on the back of that — the club in my area has many benefits for the community as some have alluded to. The only area that my club has to run all the events is the bar area, and the bar is not open the majority of the time. Those include events on positive mental health, good relations and drink-drive awareness programmes for young people. The vast majority of the events are educational and early intervention programmes. All those events are run in our clubs through the schools or the councils, and the only place to hold them is in and around the bar area, which, for the vast majority of time, is not open. The benefits of clubs and what they do for the community far outweigh anything that they would make in bars when those bars are open. The amount of money that they make is nominal. It goes back into the community, and the community benefits from that. I just wanted to make that comment.

Mr Kearney: I agree, Michaela. Looking at the social benefits and the health benefits, my club is embarking on another health programme. That is a seven-week programme, and I think that, between them, 100 participants lost over 150 stone of weight last year. That is absolutely fantastic.

Mr McCallister: We should take the Committee.

Mr Kearney: I think that they are still recruiting. If you can get up to Cushendall, that would be no problem. If you take that out, and our club and other sports clubs that want to run that type of facility are unable to do so, the cost to the health service would be fantastic. We all believe that prevention is better than cure. If you take away the ability of sports clubs to carry out their primary function of getting people to participate in sport, the cost will be astronomical.

Mr Lyons: Ciaran, I want to pick up on one issue that you mentioned about membership and how your membership costs are going up. Do you see that as discouraging an awful lot of people from joining or renewing their memberships?

Mr Kearney: Yes, without a doubt. One of the governing bodies that I spoke to said that it is trying to do more work in socially deprived areas, and, possibly, the odd time, it would attract some grant funding for that. It attracts people to the club who want to get heavily involved in it, but, after that grant-aided programme finishes and ongoing costs like membership fees need to be met, those people leave. The cost of being involved prevents them from being members. The membership fee for CASCs is £1,600. That is more at the top level. You are not talking about massive golf clubs or the elite facilities; you are talking more about the grass-roots clubs and what they would like to do.

Mr Lyons: You said that membership fees have increased in almost 45% of clubs. In your club, which is in my constituency, you are obviously trying to reach out and bring more members in. Do you think that you have lost members because of the increase in fees?

Mr Kearney: Are you talking about the club in Clonduff?

Mr Lyons: No, Cushendall.

Mr Kearney: We have to fundraise more to keep the membership fees low. We are probably lucky that, in a rural area, the GAA club is very popular. We have a good spirit and are able to do a lot of fundraising, with an occasional licensed bar. I can speak only for my own club, but it is as that report has stated, and that is taken from the number of clubs that Shaun spoke about earlier.

Dr Ogle: It is fair to say, as well, that there have been changes in the sports that people play. If you go out running, you do not particularly need to be a member of a club. It is anecdotal. They say that cycling is the new golf. People have left golf clubs because of the huge expense of the fees, and they move on to other things. As long as you keep down the cost of the bike, you are OK. So there are shifting patterns of participation in sport. For a team sport, in particular, the costs associated with it, and the costs of keeping the club together, can be astronomical. They are small figures; I mean that £9,000 is a small figure in overall terms, but it is absolutely enormous for a rugby club that is trying to keep teams going, play in leagues, do all the travel and everything else. In that sense, rates relief is highly significant.

Our board has been looking at this for a long time. In 2010, we looked at it. What Ryan said is very interesting. They came to the same conclusion at the time, about the 80% mandatory and then having this discretionary 20%, which they thought was a very good idea. It was to give accountability to the local level.

Mr Lyons: Have you or any of your clubs carried out research on the effect of this? If there were 100% rates relief, what savings would it give to you? What could you do with membership fees?

Mr Kearney: Per club? I am not aware of that research.

Mr Johnston: I have done a few brief calculations, without even going back to the membership. Based on 45 of our clubs, 15 are currently CASCs, and 30 have neither status at the minute. However, most of them — all of them that I know — are taking the CASC route because it is mandatory now. You are either a CASC or a charity. Based on £9,000 multiplied 40 clubs, it is working out at £360,000, just in rugby in Northern Ireland. It is a massive amount of money.

Mr Lyons: That is just over those 45 clubs.

Mr Johnston: Yes.

Mr Lyons: I do not know whether any of you will be able to give an answer to this final question. From what you have said so far about the bars, they seem to be underutilised. People do not seem to use them much, and you are not getting much out of them. Do you think that any clubs would be tempted to say, "We have a choice here: we can either keep our liquor licence and continue to pay part rates or we can get rid of our liquor licence and get the full rates relief"? Do you think that many clubs would say they would be better off by just getting rid of the liquor licence? Might that be a consequence of this, or do you think that, at the end of the day, it is a small enough sum and would not impact on a decision like that?

Mr Feeney: I do not know whether it would be a consequence, Mr Lyons. It may be something that people will consider. One point I will make to you is that, in the GAA, the number of our social clubs is dropping. We have a situation with social clubs closing every year; so it is not that sports clubs are increasing social clubs. Social clubs are at a very low level in the association and are getting lower. People are now focusing on community fundraising, membership or something else, rather than setting up a social club. I take Ciaran and Jim's point: it is a very different situation to that 30 years ago, when people went to social clubs to socialise. My view is that there will be fewer social clubs in the GAA in the future than there are at the moment.

Mr Lyons: I would like to ask one more question, please, Mr Chairman. I go through Cushendall quite a bit, especially during the summer, and there always seems to be a lot of fundraising going on. I know that your club is extremely active and there are a lot of people involved in it. Could any of the folk giving evidence here let us know this: what is the position now, in terms of fundraising? Do you see more and more fundraising having to take place? Why is that? Is it because of increased costs, or is it becoming a bigger part of clubs' activity?

Mr Kearney: Probably, clubs have been under-resourced for a long number of years with regard to facilities. Clubs want and need to improve their facilities, and the only way that they can pay for it is through fundraising activities. If they want to run a successful team or provide a team with the best resources, it needs to fundraise to allow that. If they want to improve facilities, they need to fundraise accordingly. A 3G pitch could cost £750,000, and that is just pulling one figure out of my head. Clubs are looking to do that because the cost of maintaining a grass pitch is very high; with our weather, it is very difficult. If they want to do that, hopefully a 3G pitch or 4G pitch can self-finance in the future. That is obviously the route that some of the Irish League clubs have also gone down. Fundraising is not done for the sake of saying that we can fundraise. It is done because it is required.

Mr Feeney: Shaun will correct me if I am wrong, but I would say that, since the restoration of devolution in 2007, there has probably been a record amount of money spent on sports capital. I commend the Executive for that and say, to all of you, keep spending. The result of that, Mr Lyons, is that there are sustainability costs. There has been significant investment right across all of the governing bodies of sport. As a result of that, people have self-fundraised. You might have a situation where Sport NI puts in 80% and the sports club puts in 20%, but the sustainability costs, such as the cost of the floodlights and of maintaining the pitch, are totally borne by the club. To maintain a full-size grass GAA pitch would cost about £15,000 a year. Now many clubs have two pitches, so we have been very successful, as all the sporting bodies have, in drawing down money, but there is now a sustainability cost that needs to be put into play. That has been an effect of the success of capital funding.

The second thing — it is not clever marketing — is that we are trying to use the idea that sports clubs make communities better places. I do not think it is too much of an argument to push. My association has set up a thing called structured giving. People give £20 per month by direct debit to the club for nothing. They get nothing in return. It is a gift. As a result of that, through being a registered CASC, they get 25p back from the Revenue on every pound donated. That is quite a successful programme for us. It is hard for me to praise Tyrone, Chair, but I will do it. Tyrone has done very well out of that by raising about £500,000 a year through structured giving in their clubs. That is another benefit of CASC. The way we sold it to all sports clubs — I do not mean to be crude — is that they should give up two pints of beer a week and contribute to their local sports club and community by giving £5. That is essentially it. I think a pint costs more than £2.50 now.

Mr Shaw: In most places.

Mr Feeney: In most places, as Jim has reminded me; that is not to say that I did not buy the last round.

Mr McCallister: When was the last time you bought? [Laughter.]

Mr Feeney: Yes, I was waiting for that. The point is that there is also a benefit through a structured giving programme, but I would put it down to massive capital investment and sustainability costs.

Mr Lyons: So you praise us for spending lots of money, and you want us to keep spending lots of money, but then you want us to help you out with the upkeep as well.

Mr Feeney: That is the problem with voters, Mr Lyons. [Laughter.]

Mr Wells: Does your group include golf clubs?

Mr Kearney: The Golfing Union of Ireland's Ulster branch is a member of our group, yes.

Mr Wells: There are two types of golf clubs: the membership-owned and the proprietor-owned. I have to say that some of the membership-owned ones, even in my own area, have excellent facilities and are more than capable of taking quite a sizeable social function, and do, for obvious reasons. I know of a situation where two clubs are side by side. One is owned by the membership, and it can get grants from Sport Northern Ireland and lottery grants, and it has a big function room. Down the road is one that is owned by an individual and his family, and it is trying to compete. It has to charge VAT on its fees, whilst, of course, the one that is owned by the members does not. Can you not understand why there would be a reluctance for the proprietor-owned club to agree to any form of derating? They have to pay rates on everything.

Mr Kearney: I can understand that. I had a conversation with Kevin Stevens from the Golfing Union of Ireland's Ulster branch the other day. I suppose the money that is made from the membership club gets reinvested back into the club. It is not a private enterprise. It gets reinvested to ensure that the course is maintained as well as possible and, hopefully, that the membership fees are lower, making it more attractive and open to the general public.

Mr Wells: The same principle applies to the proprietor-owned clubs, but the difference is that they have one hand tied behind their back. They get no form of grant aid, they have to charge VAT and they pay full rates. You are asking for that advantage to be extended to the membership clubs.

Mr Kearney: I am not sure if that is a question.

Mr Wells: Is it not the case that you are asking for further advantage to be given to the membership clubs as opposed to the proprietor-owned clubs?

Mr Kearney: Yes, it is part of the Bill, and I outlined the view of our members.

Mr Wells: The other point that is made to me by clubs that are owned by individuals is that all the sports here are perceived, from outside, as being extremely wealthy. Am I right in thinking that, for instance, that as a result of Croke Park being used for soccer and other events, each GAA county got £1 million?

Mr Feeney: No, that is not correct.

Mr Wells: Is it not correct? It was in the newspapers. [Laughter.]

Mr Feeney: No. A significant amount of money came in, Mr Wells, but it was reinvested in grass-roots development. It was not given out and divided up to each county. About £8 million came to Ulster out of that, and that was reinvested. For example, when we were building county facilities, Sport NI would have put up a level of money and we would have done the same. The figure, as I understand it, that came to Ulster was about £8 million.

Mr Wells: That is still roughly about £1 million per county.

Mr Feeney: Yes, but, for example, more money might have been put into certain areas of need. It would not have been divided up like that.

Mr Wells: Equally with rugby, there has been an incredibly successful World Cup. Northern Ireland and the Republic are jointly bidding for the World Cup in 2022. Presumably, as a result of that huge success, a large pot of money will be ploughed back into club development in Northern Ireland.

Mr Johnston: Any money that is brought in will go into community outreach and grass-roots development. For example, most recently we, unfortunately, lost in the region of 15 staff from an externally-funded programme. I know that there is a perception from the outside that the governing bodies are wealthy, but, from the inside, Ulster Rugby did not have the resources to continue those posts, even though they were essential to the running of the organisation. I can wholeheartedly say that Ulster Rugby and the IRFU Ulster Branch are not wealthy.

Mr Wells: Jim, I am an avid supporter of the green-and-white army. We have had a fantastic season —

Mr Shaw: I appreciate that.

Mr Wells: — and we are going to Europe. The only problem is that the semi-final clashes with an event that I have booked for already; that is my only concern. Undoubtedly, a windfall of money will come to the IFA. Is that not going to go back into the grass roots?

Mr Shaw: There are a lot of costs involved in going to France. We may get €8 million, but a lot of that will be spent on getting there and staying there, etc. That is at the professional level, where there are bonuses for players, etc. There will be a residue, which could amount to €2 million, all of which we intend to put into grass-roots and elite development. It is important to develop the next generation and allow football to be enjoyed by everyone. Our strapline at the moment is 'Football for All'. That will go into the genuine playing of the game itself, not facilities. That is the intention.

Mr Wells: Equally, Tyrone GAA has a phenomenal reputation for being able to claim funding packages. It far outstrips other counties —

Ms Boyle: In everything, Jim.

Mr Wells: I know nothing about GAA, but I know that Tyrone GAA is incredibly successful in making funding applications. The point that has been made to me by ordinary providers of entertainment and hospitality is that they have none of this. They have no grant aid nor any windfalls from your international success, yet they are expected to pay full whack. There is no rates relief for restaurants; they have to pay full VAT, and they have no grant aid. That is the perception. They are up against three bodies, which are perceived from the outside to be incredibly successful, and justifiably so, but also able to attract external funding. What is your view on that?

Mr Feeney: I do not disagree with your premise, Mr Wells. The point that I would make about Tyrone GAA and all the sports governing bodies is that for every pound invested by government there is a pound, if not more, put in by the sporting bodies. The Garvaghy centre in Tyrone, for example, was a £6·4 million project that provided a significant number of jobs in the construction industry. The same goes for Ravenhill and Windsor Park. We are providing a significant economic windfall for the entire community.

To address your point, however, we are not in competition with the hospitality sector; let us be very clear about that. There is a small minority of social clubs that exist within the IFA, Ulster Rugby and the GAA — they are in a minority — that are used on an occasional basis and they are not, in any way, in competition with large hotels or with bars or restaurants. That is the message that we are trying to put out. I can understand the point that you are putting forward and the perception out there, but, in reality, that is not the case.

Mr Wells: There is a golf club in my area that is more than capable of competing with any hotel, and it does so, but it starts with an inbuilt advantage, which is that it does not pay any VAT or rates. Huge grant aid has been poured into that club for its sporting facilities. Therefore, the local hospitality industry is saying, "How on earth can we compete with that?". They cannot because that institution can price much lower than can a privately owned facility.

Mr Shaw: It should be remembered that social clubs registered under the 1996 Act pay all those costs as well — VAT, rates etc — and comply with every legal requirement.

Mr Wells: What you are suggesting is that, in fact, in an ideal world, they would not pay rates.

Mr Shaw: No, I am not; I did not say that. They pay rates for their dedicated sports facilities. That is the point that we were making earlier. As clubs, they pay all their dues to society. They lodge their accounts etc with the relevant government body. They pay VAT, obviously. You have to pay VAT if you are a registered social club.

Mr Wells: But they do not have to pay VAT on their membership fees.

Mr Shaw: Yes, they do. As a social club, you pay VAT —

Mr Wells: But amateur sporting clubs —

Mr Shaw: No. We pay VAT on membership because it is membership of the social club.

Mr Wells: No, but membership in terms of green fees, they do not have to —

Mr Shaw: Membership of [Inaudible.]

section does not attract VAT; I accept that. Membership of the social club itself attracts VAT.

Mr Wells: A club that is owned by members does not pay VAT, but a club that is owned by a private individual does on its green fees.

Mr Shaw: If it is commercial and a private individual, yes.

Mr Wells: Again, it is a 20% difference, yet they have none of the access to grant aid that is clearly pouring in, and quite rightly so, to sporting facilities. Is the compromise here not that there would be a cut-off point when you get to an extremely high level of provision? OK; many of you are talking about small clubs. Are you responsible for that huge mural on the gable in Cushendall, by the way?

Mr Kearney: I am not, no. [Laughter.]

Mr Wells: You should be paying rates on that; it is enormous.

Mr Kearney: It is an indicator of our success. [Laughter.]

Mr Wells: Surely, when you get to a very high level of multi-million-pound turnover, there has to be a cut-off point where a social club, on an ordinary sporting occasion, has actually got to a level where it is practically commercial.

Mr Shaw: We are talking about soccer or football clubs. We are not talking about the clubs at the highest level here, because they are professional clubs as we designate them. They are not turning over millions; I assure you of that. It is modest in many ways. Some that are successful in Europe get a windfall occasionally, as we know, but we are talking here about the clubs beneath them — the amateur clubs. We are not talking about the Linfields, Glentorans or senior clubs.

Mr Wells: Some of those amateur clubs have very high turnovers as well because they have fantastic facilities.

Mr Shaw: Not very many.

Mr Feeney: There are not very many. To support Jim's point here, Mr Wells, where we are coming from at the moment is that we are not asking for anything other than that amateur clubs that reinvest their income in grass-roots development get rate relief. Any clubs that are professional should be totally compliant with tax law with regard to private entities. There is no issue on this side of the table on that. We are just saying that amateur clubs that reinvest and provide local community provision be given 100% rate relief under the CASC scheme to actually marry with what happens in mainland Britain. It is exactly the same policy there for professional clubs as it would be here.

Mr Ó Muilleoir: Just to finish, I would have no issue if Mr Wells wanted to bring the particular circumstances of golf clubs and people with very large revenues forward to the Minister, who is trying to work out what is the best way to go about this. I think that we are generally agreed that the Bill, if it mirrors, Chair, what you were trying to do, which is that if you have a bar, you will pay rates on your bar but the 20% off the stands would be relieved and so on, could get through as quickly as possible. We believe that everybody has to play a part in funding the services that you get for rates, so that would cover us.

Anto Finnegan, that great sport and community leader, has a little tweet here, which I will just read into the record. He says:

and,

He then links to a report that states:

That is why we are in favour of what you are doing, not because we want anybody to have very successful clubs — fair play to them if they do — but because we want those results and outcomes for our society.

The Chairperson (Mr McKay): That is a good note to finish on. OK, gentlemen, thank you all very much.